Welcome to French Tech Updates! Your weekly source of startup, VC, and tech news and insights from the French market. I’m James, a startup-obsessed American living in Paris. Here’s what you need to know this week.

On a personal note, I graduated from INSEAD’s MBA program on Friday, which is why this week’s newsletter was delayed by 1-day. Thanks for your patience!

2023—the year the tide went out 🌊

Happy end of the year! There are just 13 days left in 2023. And what a weird year it has been. On one hand, global venture funding is down 42% compared to 2022, startup shutdowns are on the rise, and the banking sector experienced a crisis that took down three institutions in a matter of weeks.

On the other hand, Generative AI startups have attracted over $10bn of venture capital, global inflation has started to decline, and rates of new business creation remain strong.

As Warren Buffet once said, “a rising tide floats all boats…it’s only when the tide goes out do you discover who’s been swimming naked.” In 2023, the tide went out, and many managers and funds were left scrambling to preserve their modesty. The market of 2023 has rewarded savvy and nimble leaders but also punished mistakes. It’s difficult to say if a new trend has taken hold yet for the start of 2024, but it seems likely that the environment will remain challenging at least for the next several months.

Lastly, a quick programming message: French Tech Updates will be off during the next two weeks for the holidays. See you again in the new year 🥳.

Now, let’s jump into this week’s update!

What’s new this week in 🇫🇷

Last week saw new funding announcements from multiple VCs an exciting developments around energy and manufacturing for the second half of this decade. Here are the headlines you need to know.

• 🇪🇺 Paris-based VC Singular raises €400M for their new fund: with a team of just 10, the early-stage firm has secured €600M in just 3 years and deployed capital into giants like Qonto and Stripe.

• 🇪🇺 Lyon-based Axelo Capital closed their second fund with €73M: they plan to use the funds for early-stage investments from €200K-€2M into next-gen B2B startups.

• 🏭 Huawei’s first overseas factory to open in France: The factory is projected to add 500 jobs and is scheduled to open in 2025. It will be located in Brumath, a commune with fewer than 10,00 residents.

• Funding “the energy of the future”: President Macron announced new support from the France 2030 investment program to explore the development of natural hydrogen as a source of cheap, low-carbon energy.

• At COP28, acknowledgment outshone actions: the 100,000 attendees largely agreed on the need for climate action but failed to set firm deadlines or action plans.

Startup To Watch – Pivot 👀

At the beginning of last week, when I started writing this edition of the newsletter, Pivot was a months-old company that had raised €5M in funding. Now, they’re a months-old company with €25M in funding thanks to a new Series A round closed last week. The company was founded earlier this year by the heavy-hitting team of Romain Libeau (Ex-CPO at Swile), Marc-Antoine Lacroix (Ex-CPO at Qonto), and Estelle Giuly (Ex-Lead Workflow Engineer at Wave.ai).

They’re on a mission to improve the procurement process, which, let’s be honest, is a category that has a lot of room for improvement. When was the last time someone said they love their procurement process?…exactly. Other startups in the space like US-based Zip ($1.5bn valuation) and Canadian Procurify (estimated $300M valuation) have proven the market is ready for a change. With an estimated 10 customers already signed up, including gaming studio unicorn Voodoo, the team at Pivot is on their way to leading that change in Europe.

New Funding 💶

8 companies raised €77.8M in new funding last week across pre-seed to Series B rounds.

Events This Week 🗓

• Wednesday, December 20th 7:00 PM: Apero Startup with Schoolab Startups

• Thursday, December 21th 2:00—7:30 PM: Paris Invest 2024, startup and investor networking

What Else I’m Reading 📚

• Baguettes in Space: €21M has been allocated to fund the development of a low-cost rocket nicknamed Baguette One, with a goal of first flight by the start of 2026.

• Lazard and Elia Partners enter talks for a strategic partnership: the resulting investment platform would give Lazard’s clients access to private-company investments through Elia Partners.

• How many millionaires are there? If you want to save yourself the click, the answer is 62.4 million, or 0.8% of the global population. But it’s worth taking a look at the full post to see the distribution across countries. France is in a relatively positive position with 4.5% of all millionaires and just 0.8% of the world’s population.